Chapter 13 - Dealing With Jewellery Wholesalers & Suppliers

Dealing with a wholesaler for the first time can be a little daunting, especially for new businesses. Unless they've come to you by recommendation - highly unlikely, as retailers guard their suppliers religiously - it's hard to know what to expect. The goods they supply could be first rate, shoddy and broken, or fail to arrive for many months.

Firstly, will a jewellery wholesaler do business with you?

The answer to this question is usually yes. Jewellery wholesalers are used to dealing with small businesses: gift shops, accessory shops, market traders, and party planners. You will find that they are very much aware that market traders can outperform high street shops, and that start up small businesses are often not VAT registered or work from home.

What to Expect

In an ideal world, retailers would buy all their stock from 1 or 2 local wholesalers. The stock would be well priced, come in wonderful designs, arrive in perfect packaging and pristine condition, never break or cause problems for yourself or your customers, and generate healthy profits. But you have to do business in the real world, and in the real world things are never perfect, and expecting them to be is not going to do you or your business any good.

The most important thing I learned during my retail years was what to expect from suppliers. When you know what to expect, then you know when there's a real problem that you need to do something about. When you know what to expect, you know when NOT to get worked up over something that either can't be helped or isn't worth the time and effort attempting to fix.

The first thing you should expect from your jewellery wholesaler is the items you ordered. This may seem obvious, but the reality is that many wholesalers - not the best ones, of course - do not always send you the precise goods you requested. This may take the form of supplying you with the correct items, but in different colours than those you specified, or in the worst cases, of supplying slightly different items.

There are two reasons why this may occur. The first is that their catalogue may have some small print somewhere along the lines of 'assorted colours supplied' or 'items similar to those listed'. This is often done to cut down on extra work for the wholesaler - rather than photographing each item in each colour and variation; they photograph only one, and pick and pack from the larger batch of assorted colours and styles.

The second reason is that they may have sold out of the items you requested, and rather than contact you and tell you, they attempt to pass off similar items rather than run the risk of losing your business. Of course, what they don't realise is that when you receive the unasked for goods, there's a very high likelihood that they'll lose your business anyway.

The second thing you should expect is that your jewellery arrives well packaged. This means that each item should be packed separately, especially in the case of sterling silver jewellery which can scratch easily. Items not well packed can be very difficult to unpack, particularly if there are a lot of necklaces with chains or strings involved. There really is no reason for poor packaging.

If any of these things happen, you've encountered a bad supplier and you should treat them accordingly.

What NOT to expect

This is going to be a little more controversial, as many retailers expect the kitchen sink from their suppliers, and when anything goes even slightly wrong, they feel entitled to complain. Firstly, remember that you are not an end consumer. There is still risk associated with your buying, and there are things you must accept as part of the buying process.

Firstly, you cannot expect wholesalers to supply you with jewellery ready for immediate re-sale. This means that sourcing packaging (boxes, cards, etc.) is your responsibility. While the jewellery may come packaged, this packaging is not for retail display. You need to do some work in this area yourselves.

Secondly, you should not expect perfection. Though good wholesalers check items before they are shipped or as they are unboxed into their warehouse, they don't spend the same amount of time that you, the retailer, will spend to ensure that quality is 100%. What this means, is that for costume jewellery you shouldn't be surprised if one item in twenty needs to have a clasp tightened or a stone super glued back into place. This is normal, and in many cases one faulty item in twenty is a good result from a wholesaler. You should only consider sending the item back to the wholesaler if you can't fix it yourself. If you do start returning items that can be fixed by a single turn of a screw, you're going to frustrate your supplier, which won't do you any good in the long run.

Only end consumers have the right to expect perfection.

In a similar vein, if you've received a batch of watches, and some of them do not appear to be working or are showing an incorrect time, then you should do one of two things: change the batteries or reset the watch to the correct time. The wholesaler is unlikely to change the time on a watch they receive, so it will usually come with factory settings. Likewise, a dead battery does not mean a dead watch. In a batch of one hundred watches, five dead batteries would not be uncommon or cause for concern. This does not mean the watches themselves are of poor quality.

The point I'm making is that though you can expect good quality goods, and you can expect the goods to be what you ordered, you need to remember that you're paying wholesale prices, not retail. The mark-up from wholesale to retail is there in part because of the extra work involved in ensuring each individual item is up to scratch. Within reason, it's your job to do this.

Minimum Orders

Most jewellery wholesalers have a minimum order requirement. This is used to deter retail buyers and to streamline their own processes. The paperwork involved in processing a £20 and a £200 order is often the same, and there is rarely that much difference in shipping costs. Many suppliers are simply unwilling to process tiny orders because the work and cost involved is the same as for larger orders. You need to respect this, and either place an order that meets the requirements, or wait until you are in a position to place a larger order. Phoning the supplier up and trying to get them to make an exception for you will lead to failure and will be a black mark against you in the supplier's book.

Suppliers do bend rules, but they do so for large customers, not small ones. And there is nothing like arguing over the minimum order size to mark you out as a small customer of little value.

If you do find a supplier without any minimum order size, or one whose minimum requirements are very low, chances are you've stumbled across a small supplier operating from home - they do exist, especially online. There is nothing wrong with this, but you should be aware that they will be unlikely to stock large volumes, which can be problematic when it comes time to re-order popular lines.

What NOT to do

You do not want to annoy your supplier. There is nothing worse than finding a good supplier who sells unique items that your customers love, only to have them drop you as a customer after a few orders. In the past, we have dropped a small number of customers, and usually for the same reasons:

Excessive returns. If you return items that are not damaged, or that can be easily fixed, you are going to annoy your supplier. And if a higher proportion of your orders suffer from damaged items than the orders of other customers, your supplier will probably blame you, though they may not say so to your face. The end result of this is that they drop you as a customer, and if that happens, there is nothing you can do about it.

Abusive phone calls. If a necklace broke after you sold it to a customer, by all means raise the issue with your supplier if you are convinced the item was defective, but be sure to follow their own returns or complaints procedure. Getting angry over the phone with your supplier is a sure fired way of being dropped by that supplier.

You should also be careful about excessive telephone calls. Hounding your supplier about irrelevant issues or asking silly questions that are already answered on their website is only going to annoy them.

Recognise your own size. Many retailers, especially those with high street shops, have incorrect opinions about their own size, and their expectations based on that size are unrealistic. If you are placing a £500 jewellery order with a supplier every month, you are not a big customer. You are one of many regular sized or small customers. Do not act like you are a big customer. Do not act like you are a supplier's only customer. They may be your best supplier, but that does not make you their best customer.

What makes you a big customer?

In the world of jewellery retail, spending £2000 a month in the first half of the year and £4000 a month in the later months would put you in the top few percent of independent jewellery retailers. Suppliers might give you more leeway if you fall into this category, but if you don't, you're just one of a crowd. This is harsh, but true. Remember this, and don't annoy your supplier.